TMI Blog1955 (3) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;, and not for sale. He was granted a license signed by M. L. Gupta, a licensing officer attached to the office of the Chief Controller of Imports, New Delhi and the license is dated 8-10-1948. 3. In the license granted the following condition was rubber-stamped: This licence is issued subject to the condition that the goods will be utilised only for consumption as raw material or accessories in the licence-holder's factory and that no portion thereof will be sold to any party . This condition was also signed by the licensing officer Mr. M. L. Gupta and there are the words 'for Chief Controller of Imports' below the signature of M. L. Gupta under the stamped condition. After the goods had arrived, report reached the Chief Controller of Imports that the company was violating the condition of the licence and was selling the goods to various parties all over India. The matter was taken up by the Special Police Establishment, Government of India, and the Special Police Establishment submitted a chalan against Hari Prasad Lohia and others. The Assistant Collector of Customs C. T. A. Pillai lodged a petition of complaint against the two accused in respect of the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer attached to the office of the Chief Controller of Imports, New Delhi, had no authority to sign the license and to sign the stamped condition on the license. (4) In view of the distribution of powers by Schedule 7 of the Government of India Act, 1935, the Central Government had only power to prohibit, restrict or control imports but could not validly pass any order about the distribution of goods after the same had been imported and that therefore the condition that the goods after import should be utilised by the license holder in his own factory and not be sold was beyond the competence of the Central Government. 5. Mr. G. P. Kar who appears for the complainant C. T. A. Pillai has urged that the learned Magistrate was wrong on all the above four points and that in view of his finding that there was prima facie evidence that the accused persons in the name of a bogus company had sold a portion of the fluorescent tubes and fixtures all over India, the order discharging the accused should be set aside and the case should be remanded for further enquiry. It has to be considered whether the learned Magistrate was right or wrong on the points mentioned above. 6. It will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the Notification means that import of goods is prohibited except goods covered by a special licence issued by the Chief Controller of Imports or goods covered by a special license by an officer specially authorised in this behalf by the Central Government. Thus in effect the Government made a statutory provision for granting of licence for the, particular classes of goods mentioned in the Schedule of the Notification, This comes within the terms, of Section 3(1) already quoted, namely, making provision for prohibiting, restricting or otherwise controlling the import of goods of specified description. There is no delegation involved in the provision for granting licenses for import by the Chief Controller of Imports or by any other officer specially authorised. It is difficult to understand why the learned Magistrate considered that the Chief Controller of Imports could not be validly authorised by the Central Government to issue license under Section 3(1), Imports and Exports (Control) Act, 1947. The learned Magistrate referred to Section 2(4), Defence of India Act, 1939 and to the absence of any such provision in the Imports and Exports (Control) Act, 1947. Section 2(4), Defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts, New Delhi, to issue special licenses covering goods of any descriptions mentioned in Parts II, III, IV and V of the Schedule annexed to the Notification. This Notification is signed by K. C. Ambegaokar, Deputy Secretary to the Government of India. 9. Next Mr. G. P. Kar has produced the Notification No. 7(69) dated 26-7-1947. This is an order signed by G. Rule Kamat, Joint Secretary to the Government of India and it shows that Mr. M. L. Gupta was appointed to officiate as licensing officer in the office of the Chief Controller of Imports, New Delhi from the afternoon of 8-7-1947. 10. Mr. A. K. Sen appearing on behalf of the accused opposite party has objected that these two notifications are not drawn up in the form prescribed by Section 17 of the Government of India Act, 1935 which requires that all executive action of the Dominion Government shall be expressed to be taken in the name of the Governor General''. 11. In Authorization No. 16 instead of the use of the name of the Governor-General it is stated that the Central Government is pleased to authorise the Licensing Officers in the office of the Deputy Chief Controller of Imports, Calcutta, to issue spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k that the orders authenticated by them are not orders by the Government. Accordingly it must be held that M. L. Gupta had authority as licensing officer attached to the office of the Chief Controller of Imports, New Delhi, to issue the license. 13. Mr. A. K. Sen has also urged that Authorisation No. 16 of 8-7-1943 cannot be deemed to be an order made under the Imports and Exports Control Act, 1947 as Section 4 thereof provides merely that all orders made under Rule 84 of the Defence of India Rules shall continue in force and be deemed to be orders under the Act; while the Authorisation in question is an order made under Clause (xiii) of No. 23-ITC/43 i.e. an order made under a provision of an order made under Rule 84 and not an order made under Rule 84 itself, and that the authorisation is therefore no longer valid. We cannot however accept this argument. Notification No. 23-ITC/43, being an order made under Rule 84 of the D. I. Rules is continued in force by Section 4 of the Act; and the Notification having continued to be in force, all appointments made and all action taken thereunder must continue to be valid. 14. Mr. Sen has also challenged the validity of the license be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient himself and not a condition added by the order of his superior officer; and that if imposed under such order, it was invalid. This takes us to the question who is the licensing authority. The term is not defined in the Act or in the orders under the Act; No. 2-ITC/48 Clause (a) begins by referring to an officer issuing a license but refers to the licensing authority in Sub-clauses (i), (iv) and (v). It is clear from the evidence that the office of the Chief Controller of Imports, New Delhi, works as one unit for the purpose of licensing although several licensing officers are attached to the office, all applications are made to the Chief Controller and all important cases requiring the exercise of discretion, like actual consumers' applications as opposed to regular importers' applications, are put up to him for decision and order, though after he has passed the order, the attached licensing officer dealing with the particular class of goods actually issues the license. Accordingly the Chief Controller of Imports must for the purpose of licenses issued by the New Delhi office be deemed to be the 'licensing authority' for the purpose of Clause (a) (v) of No. 2-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e.g. that the goods shall not be disposed of without the written permission of the licensing authority, that the goods shall not be sold or distributed at a price more than that which may be specified in the license and so on. Clause (v) provides that such other conditions may be imposed which the licensing authority considers to be expedient from the administrative point of view and which are not inconsistent with the provisions of the Act . 18. Mr. G. P. Kar has urged that under Section 3 (1) of the Act the Central Government may make provisions for, amongst other things, controlling import; and when the Central Government after prescribing that goods shall not be imported except under a special license, and after prescribing four specific conditions which may be imposed in such special license, has provided that any other condition not inconsistent with the provisions of the Act may be imposed by the Licensing Authority, this does not amount to delegation of power conferred upon the Central Government under Section 3 (1) of the Act, but that the Central Government have made provision for controlling imports by the two published orders, and the discretion given to the lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;bringing into and taking out of India by sea, land or air'. Mr. Sen has therefore urged that mere bringing into India of goods by sea, land and air amounts to import and the Central Government may legislate only as to the bringing of goods into India by land, sea or air, and cannot legislate as to what is to be done with the goods after import. 21. Mr. Sen has also referred to two decisions of the Privy Council which are however decisions under the Constitution of Canada. The cases in question are Attorney-General for Canada v. Attorney General for Alberta, 1916-1 AC 588 (B), and In re Board of Commerce Act, 1919 the Combines and Fair Prices Act, 1919, 1922-1 AC 191 (C). In the first case the courts were concerned with the validity of the Insurance Act, 1910, by which the Canadian Federal Government sought to regulate insurance business by introducing a licensing system. It was held by the Privy Council that the authority conferred by the British North America Act, 1867, Section 91, to legislate as to the regulation of trade and commerce did not extend to the regulation by a licensing system of a particular trade in which Canadians would otherwise be free to engage as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been said, which must determine into what category it falls. There are observations to the same effect in another Privy Council ruling relating to the interpretation of the Government of India Act, 1935 viz., Prafulla Kumar Mukherjee v. Bank of Commerce Ltd., Khulna, 51 Cal WN 599: AIR 1947 PC 60 (E). In that case the question was whether the Bengal Mopey Lenders Act, 1940, was ultra vires in so far as it affected Promissory Notes and Banking which were Federal subjects. The Privy Council held that the Bengal Money Lenders Act, 1940, deals in pith and substance with money lending and is therefore wholly within the powers of the Provincial Legislature although it incidentally trenches upon matters like Promissory Notes and Banking reserved for the Federal Legislature. 22. The Supreme Court of India dealt with the question in the case of State of Bombay v. F. N. Balsara, AIR 1951 SC 318 (F). The Supreme Court held inter alia as follows: Of the principles which govern the interpretation of the Legislative Lists, one is that none of the items in each List is to be read in a narrow or restricted sense; and the second is that where there is a seeming conflict between an entry i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, 1922-1 AC 191 (C) it was urged before the Privy Council that the subject of price control was not within the normal course of regulation of trade and commerce and this argument was accepted by the Privy Council. Under the Indian Constitution, price control is a separate item included in the 3rd List, being item No. 34 of that List. The 7th Schedule of the Government of India Act does not contain the item 'price control', and if the question of price is regarded as a question of contract between the purchaser and the seller, the subject would come under the 'contracts' which is included as item No. 10 of the concurrent legislative list of List No. 3 of the Government of India Act and therefore the Central Government might be regarded as having jurisdiction in that matter. In the case State of Bombay v. F. N. Balsara (F), the Supreme Court interpreted 'import' as not including either sale or possession of the article imported into the country by a person residing in the territory in which it imported and therefore held that there was no conflict between entry No. 19 of List I and entry No. 31 of List II, relating to the possession and sale of intoxicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e party has raised another important point, namely, that Section 5, Imports and Exports (Control) Act, 1947, does not impose any penalty for contravention of any condition imposed by the license but it only penalises contravention of an order made or deemed to have been made under the Act and that in this case no order made under the Act was directly contravened but only a condition imposed by the license was contravened and therefore no offence under Section 5, Imports and Exports (Control) Act, 1947 was committed. Section 5 of the Imports and Exports (Control) Act, 1947, reads as follows: If any person contravenes any order made or deemed to have been made under this Act, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878, as applied by Sub-section (2) of Section 3, be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.'' 27. It is clear, therefore, that the section penalises only contravention of any order made or deemed to have been made under the Act. But the question is whether contravention of a condition imposed by a license issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ordinance and, then by the Imports and Exports (Control) Act, 1950 of Pakistan. Section 3(2) of that Act provides that 'no goods of the specified description shall be imported or exported except in accordance with the conditions of a license to be issued by the Chief Controller or any other officer authorised in this behalf by the Central Government. The penal Section, Section 5, refers not only to contravention of an order or rule made under the Act but also to the contravention of any condition imposed by the license. Similarly, in the Bengal Excise Act, Act V of 1909, Section 45 refers not only to contravention of a provision of the Bengal Excise Act or any rule made thereunder, but also refers to default in complying with any condition imposed upon a licensee by a license granted under the Excise Act. It is clear that unless the penal section itself includes the contravention of a condition of the license as an offence, it is not possible to hold that the licensee by merely committing breach of a condition imposed by a license has committed the offence which consists in contravention of an order made or deemed to be made under this Act. In this view, therefore, although th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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